Council Leader signals 'challenging budgetary times ahead' in light of relentless rise in government cost impositions

The Leader of Douglas Borough Council Councillor David Christian MBE JP has signalled ‘challenging budgetary times ahead’ for the Island’s local authorities in light of the ‘relentless rise’ in costs being imposed by central government.

Councillor Christian was speaking at a time when the Council was beginning its budget process that will determine the rate for the Borough of Douglas for the 2019-2020 financial year.

He said: ‘The Council’s budgets have long been under severe pressure. The next financial year, however, will see that pressure mounting, as the Island’s local authorities will be required to pay more in employers’ National Insurance contributions, following a Treasury directive that will end the contracting-out of the State Second Pension in April 2019. For Douglas, this measure represents an added rate burden of some £200,000. That alone would add an extra 6.58p on to the town rate.

‘Earlier this year the Council made representations to Treasury, requesting that local authorities be recompensed to counter the financial impact this new legislation would have on their budgets. Regrettably, despite the Council’s protestations, no financial support from government has been forthcoming and so local authorities are faced with having to shoulder another government-imposed cost over which they have no control.

‘There is also the impact of a pay award settlement imposed on local authorities by the Public Service Commission. When Douglas set its rate levy for this current financial year it provided for an anticipated two per cent growth in wages and salaries for the Council’s workforce. There is now, however, a very real and worrying prospect that that provision will prove to be inadequate, as local authorities will have to fund a backdated pay award very late in the financial year which, inevitably, will have a knock-on effect on 2019-2020 rates.

‘Once again, local authorities have had no say in this latest call on their already overstretched finances as the Commission made its ruling without any consultation whatsoever with those forced to comply with yet another excessive demand from central government.’

Councillor Christian cautioned that an above-inflation increase to the tipping charge at the Energy from Waste plant imposed on local authorities by the Department of Infrastructure would also add to the pressure on 2019-2020 rates.

‘Each year, ahead of the budget, the Council’s Committee Members and officers are tasked to make savings, and each year savings are achieved. This year, however, the rate-setting process will be profoundly challenging. To deliver the 2019-2020 budget we must identify how best to deal with this latest raft of financial impositions without diminishing our ambition to manage public demand for and expectation of Council services. In short, we are tasked with having to massively scale up our response to these budgetary pressures if we are to remain financially resilient and continue delivering for Douglas.’